Should Citizens Compete’ Fla. Legislators Hear Opposing Opinions

Controversy ruled yesterday as opposing opinions were voiced to the Florida Joint Selective Committee on Hurricane Insurance about how Citizens Property Insurance Corp. should be funded and operated. Under present guidelines Citizens isn’t supposed to compete with commercial insurance companies, and in fact, is supposed to be downsized — but one recommendation suggested it should become more competitive.

“We are a very large insurance company that I believe will be around for a long time, and we do have to build up the infrastructure,” Bob Ricker, Citizens executive director told the committee, which is reviewing insurance topics prior to March sessions of the Florida Legislature.

Two ideas were debated: Having Citizens write wind coverage for the entire state, instead of just along the coastline; and allowing it to charge competitive rates rather than setting them above the highest rates charged by private insurers.

Ricker made three additional recommendations: That the state’s insurer or last-resort should be permitted to add a rate equalization surcharge that would ensure the company’s rates aren’t competitive with private companies; that legislators should allow Citizens to offer full coverage to policyholders who only have windstorm policies through the company; and that homeowners should be prevented people from buying a homeowners policy from Citizens at the last minute.

Losses sustained during four 2004 hurricanes in Florida by the Citizens Property Insurance Corp. could result in an assessment that would increase all Florida homeowner’s policies. Ricker estimated hurricane-related claims could cost Citizens $1.5 billion, but said final data won’t be available until March.

“That comes very close to us needing to do an assessment,” Ricker told the committee. He said that if Citizens needs to borrow money to pay claims that cost would be passed along to policyholders.

Committee members made no recommendations but will continue to discuss the topic at a Jan. 24 meeting.

Topics Florida